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Are Investors Undervaluing General Finance (GFN) Right Now?

Zacks Equity Research
Does Idex (IEX) have what it takes to be a top stock pick for momentum investors? Let's find out.

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

General Finance (GFN) is a stock many investors are watching right now. GFN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also recognize that GFN has a P/B ratio of 2.26. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.75. Over the past 12 months, GFN's P/B has been as high as 4.20 and as low as 1.61, with a median of 2.62.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GFN has a P/S ratio of 0.8. This compares to its industry's average P/S of 0.89.

These are only a few of the key metrics included in General Finance's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GFN looks like an impressive value stock at the moment.


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